AT&T/BellSouth Pretend GAO Report Supports Merger Claims

from the up-is-down,-left-is-right dept

Remember a few weeks back when the GAO came out with a report that totally trashed the FCC's method for collecting broadband competition data? The same report that found very little competition and also found that in the absence of FCC regulations, broadband prices went up instead of down? Well, Matthew Lasar writes in to let us know that AT&T and BellSouth have responded to the report, saying that it actually supports the reasons for a merger -- though, they conveniently don't appear to have read the actual report. Somehow, lawyers for the companies claim that the GAO report shows that prices have declined across the board -- ignoring that the report found the decline in pricing was due to regulatory efforts in areas where there wasn't enough competition. In the few areas where the FCC let the companies run free, it found that prices were higher. In other words, there's not enough competition out there, which was the main conclusion of the GAO report. If that's the case, it's hard to see how such a big merger helps increase the competition at all.

Antitrust Division Sees No Problems

The Chicago Tribune ran an article on the merger yesterday with the title, "FCC may end AT&T stalemate". This (almost throw-away) line caught my eye:

"The Antitrust Division of the Justice Department cleared the deal on Oct. 11, declaring there were no competitive concerns and opting not to require the combined company to divest assets or make any other concessions."

Why would there be "competitive concerns" when practically the last two Telcos out there want to merge? No problem there.

But seriously, if this is the standard of the federal government, why should the companies themselves be any better?

FTFA: this is classic

The GAO's most prominent finding, summarized in the first sentence of the report, suggests that meaningful competition does not exist in the commercial telecommunications business in the United States.

"In the 16 major metropolitan areas we examined, available data suggest that facilities-based competitive alternatives for dedicated access are not widely available," the study discloses. "Data on the presence of competitors in commercial buildings suggest that competitors are serving, on average, less than 6 percent of the buildings with demand for dedicated access in these areas."

Nonetheless, AT&T/BellSouth attorneys say that this finding has no immediate significance.

in other words: true there is no competition for broadband internet access, but some day there might be, that's why we need to merge back into the old Ma Bell, so that the continued crushing of competition can go on unimpeeded.

So lets get this straight...

A report shows that there is a lack of competition in broadband.

Two big telcos that want to merge try to use that report as evidence that there is competition in broadband.

The two telcos in question think the best way to conserve the competitive spirit is to merge, thus eliminating one of the two "competitors". So they honestly think that be merging and basically forcing people into having only one choice (the merged company in question) they will encourage competition?

When I go back to college I think I'm going to minor in corporate talk so that I too can be versed in double talk and misdirection.

Understand the landscape

The merging of AT&T and Bell South does nothing to increase or decrease competition. These were two companies that operated in different geographic locations, they didn't compete against each other before they merge, so what difference does it make?

The real battle is the telecom's vs. cable, unless of course wireless steps up, BPL comes into play or something else comes around.

The govt. is holding it up because it wants something from AT&T. Don't think that what they want has anything to do with benefiting the consumer.